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This is another thing they share; All of these names were among the biggest winners of 2020 and were part of the homestay period, but now these transactions may be over. For some names, there were signs that conference calls 2021 could be more difficult. At the same time, a period of stagnation or regression may follow the rapid growth experienced by these stocks.
Troubles with Comparable Figures
More clearly, do not be surprised if growth in the upcoming period fails to meet the great expectations priced in stocks.
No Margin Growth
Is It the End?
The market seems to be sending a message that higher than expected results are not enough to raise these stocks.
In fact, this is the second time in a row. All four stocks have failed to show a significant rise since the beginning of September.
The message of the market is not entirely clear. Still, it seems to indicate that companies are unlikely to continue the high profits and revenue growth they had achieved since the outbreak. This may translate into slower growth rates in the upcoming period, making it difficult for investors to justify current valuations of these shares.
For example, Apple is trading at about 30 times its financial 2023 profit forecast of $ 4.67. This is the highest price-earnings fold since 2007, and it’s also almost twice the average price-earnings ratio for this period.
Apple Price-Earnings Ratio
The recent decline in the stocks of some of these technology giants may be a signal that the market is experiencing a shift. This shift could mean a decrease in comparable figures and perhaps in prices.
Explanation: Michael Kramer and Mott Capital Management clients own shares of Apple. Mott Capital Management, LLC is a registered investment advisory. The information presented here is for informational purposes only and is not an offer or incentive to buy or sell any securities, investment or investment strategies. Investments involve risk and are not guaranteed unless otherwise stated. Always consult with a qualified financial advisor and / or a financial adviser before implementing any strategy reviewed here. Upon request, the company will provide a list of all recommendations made in the last twelve months. Past performance is not an indicator of future results.